5/18/2011 Different ways for a company to finance its operations ·Choice of finance:: Equity vs.debt Ordinary shares vs.preferred shares What are the major considerations in making a choice? 9 How to become a shareholder? A person may become a shareholder of a company with a share capital: By taking shares from the company in exchange for a contribution of capital By taking a transfer of shares from an existing member Through an employees'share scheme By operation of law under which the shares of an existing member devolve on,or are vested in,the person 10 55/18/2011 5 9 Different ways for a company to finance its operations • Choice of finance:  Equity vs. debt  Ordinary shares vs. preferred shares • What are the major considerations in making a choice? 10 How to become a shareholder? A person may become a shareholder of a company with a share capital: • By taking shares from the company in exchange for a contribution of capital • By taking a transfer of shares from an existing member • Through an employees’ share scheme • By operation of law under which the shares of an existing member devolve on, or are vested in, the person